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Schwab CEO Gets Pay Hike - Analyst Blog

By: Zacks.com
Posted: 4/1/2013 7:12:00 PM
Referenced Stocks: CEO;ETFC;IBKR;RJF;SCHW

The Charles Schwab Corporation 's ( SCHW ) Chief Executive Officer (CEO) Walt Bettinger received a 1.3% pay hike for 2012. With this, Bettinger's compensation has been revised to $10.2 million, according to a Securities and Exchange Commission filing last week.

The CEO's pay package includes a base salary of $983,333. In addition, he received stock awards worth $2.6 million, option awards of $3.9 million and a bonus of $2.7 million, as per the Securities and Exchange Commission's annual proxy filing.

Further, in January, Mr. Bettinger was awarded $10.5 million as a long-term compensation. Provided the company manages to achieve its targeted performance related to earnings and return on equity, Mr. Bettinger's compensation award might be elevated to $17.8 million.

Bettinger, who completed 4 successful years as a CEO in Schwab, has received a flat total annual pay of about $10 million during his tenure.

Moreover, last week, in the Securities and Exchange Commission filing, the company also made an announcement regarding decline in compensation of the company's chairman Charles Schwab. His compensation declined by 1.8% to $4.4 million in 2012. He received a salary of $500,000 and stock awards of $1.2 million. Further, he also earned $1.8 million in stock options along with a bonus of $912,500.

The pay hike of Schwab's CEO comes in light of the exceptional results the company came up with in 2012. Schwab's profit marked a 7% increase to $928 million in 2012. Further, its revenue rose 4% to $4.9 billion in 2012.

However, these positives were offset by the impact of low interest rate environment. Further in the past few years, Schwab has been facing weaker trading volumes.

Moreover, Schwab has been continuously increasing fee waivers due to the persistent low interest rate scenario in order to maintain client's yield at positive levels. This has resulted in a decline in Schwab's assets management and revenues from administration. Further, the slow economic recovery is apprehended to hamper revenue growth.

Schwab currently carries a Zacks Rank #2 (Buy). In the same industry, other firms that look attractive include E*TRADE Financial Corporation ( ETFC ), Raymond James Financial, Inc . ( RJF ) and Interactive Brokers Group, Inc . ( IBKR ). All these stocks carry a Zacks Rank #2 (Buy).



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RAYMOND JAS FIN (RJF): Free Stock Analysis Report

SCHWAB(CHAS) (SCHW): Free Stock Analysis Report

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